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With the second round of land auction rules adjustment in 22 cities, quality competition has become a multi-city auction market standard match. The shaping of enterprises' own vitality, product power, innovation and competitiveness is becoming the underlying logic leading the industry into high-quality development.
To this end, Hexun.com will launch a special program named "Penetrating Product Capabilities: Reality and Dream of Competitive Quality Era" to comprehensively disintegrate the quality competition in the real estate industry, and at the same time deeply analyze the sample enterprises to make reform measures and phased progress in quality improvement.
Accelerating digital development is the development direction clearly proposed in China's 14th Five-Year Plan and the outline of the 2035 Vision Goals. At present, digital transformation has become the topic that most enterprises are thinking about, and the real estate industry is no exception.
Related reports released by TMTPost in September show that in 2021, more than 90% of the surveyed real estate enterprises have increased their digital investment. Among them, 26.09% real estate enterprises have increased their digital investment ratio by more than 30%, and some real estate enterprises have even increased by 100%. In the age of management dividend, the importance of digital capability is self-evident.
Especially in the context of increasingly fierce competition in the industry, digital capability will largely determine the competitive strength of real estate enterprises. However, due to the relatively extensive management mode of the real estate industry before, the overall level of digital construction of the industry is not high, only a few real estate enterprises with forward-looking strategic vision into digital transformation, including KWG.
Comprehensive digital transformation
In the case of continued market downturn, KWG has achieved brilliant sales performance. Data shows that the pre-sale amount of KWG from January to September was RMB 76.8 billion, with a cumulative year-on-year growth of 16%, ranking firmly in the industry TOP 50.
In addition to the investment layout factor, one reason that cannot be ignored is the empowerment from digital transformation. Since this year, KWG has developed the online marketing platform of “Yihe Good House”, which has become a new channel to show the dynamics of all property sources. At the same time, the company has also carried out a series of energy storage plans to improve the marketing digital management ability.
It is reported that KWG used new media platforms such as “Yihe Good Houseing” and Douyin to jointly promote in many regions of the country, and carried out cross-border activities with car companies and FMCG brands. Companies in several cities also launched live-streaming activities, achieving a total audience of more than 2 million viewers, and reaching the result of selling 500 units online in seconds.
This is just a small epitome of KWG's digital capabilities. Tang Liang, general manager of KWG's Group Information Management Center, said to Hexun Real Estate that KWG's digital transformation includes five directions: First, to build a digital product and service capability platform; Second, digital construction of internal business processes, driving business operations with data; Thirdly, the digital management platform for organizational structure and talent system, eliminating boundary, realizing flat and platform empowerment; Fourth, digital integration and upstream and downstream cooperation of supply chain ecology; Fifth, the digital innovation of business model, to build the digital innovation platform of KWG around the concept of big operation, big asset management and big service.
Taking digital managed organizations and talent system as an example, on August 25th, KWG launched the hr DHR digital platform. The implementation scope of this DHR digital platform covers all 14 business segments, covering the implementation and delivery of many sub-modules such as organization, personnel, attendance, salary, training, performance, talent cultivation and development. The construction of this platform enables the management of the enterprise to improve the efficiency of digital transformation, build digital talent model, establish digital talent inventory mechanism, promote efficient and agile organization, optimize management and control model, empower organization construction through digital platform, and provide strong support for the transformation of enterprise operation mode and effective implementation of strategy.
Tang Liang said the digital transformation of the entire industry is in its infancy, KWG has its own understanding of digital transformation, namely through the application of digital technology, improve the efficiency of enterprise operation and management from the inside, build digital links with external users, and make business online, date online and equipment intelligent. Through the application of big data analysis technology and AI technology, the enterprise can improve its operation ability, customer insight ability and business innovation ability, thus creating more possibilities for exploring new business models.
"Customer-centered, providing customers with quality products and services has always been the corporate values of KWG", Tang Liang believes that the digital transformation of real estate companies should play to their core strengths, which is space + service + digital technology. To create high-quality products expected by customers and provide high-quality service beyond customer expectations. At the same time, through the application of digital technology, making customers become loyal fans of the enterprise, will bring the power source of continuous innovation for the enterprise, which is also the real value of digital transformation of real estate enterprises.
The leadership of KWG has always regarded digital construction as one of the strategic priorities of the enterprise. According to Tang Liang, after the Group was listed in Hong Kong in 2007, the Group comprehensively started the construction of enterprise ERP information 2.0 system, which lasted for ten years and realized the online platform of the whole Group’s residential development to property management, commercial leasing and customer service management and other full module business. In 2019, the Group started the 3.0 digital construction phase of SAP business financial integration. The project lasted for two years, and build a unified, powerful, efficient, stable and safe digital platform to fully support the steady and quality development of the Group in the future.
At present, KWG has completed SAP business financial integration platform, shared operation platform, “Yihe Good Housing” digital marketing platform, KWG Smart customer service platform and other digital platforms. Tang Liang said that with the steady growth of scale and the development of diversified businesses, KWG's digital transformation is moving towards the goal of comprehensive digitalization and intelligent 4.0. In the future, the Group will continue to upgrade the management ability of digital platform, enabling enterprise reform and business innovation.
Digital value realization
Generally speaking, digital transformation requires a long time of investment before it starts to have transformation effects. For KWG, however, years of exploration in digital transformation are starting to pay off.
Months ago, KWG held 2021 Habitat Aesthetics Conference to reveal its latest thinking on products. At the meeting, KWG proposed 5.0 life aesthetics, based on the study of 152 living scenarios, to create products from the perspective of indoor living scenes, user experience and usage. Zhang Zhiyang, General Manager of KWG Design Management Center, said, "KWG 5.0 is not only a spiritual aesthetics, but also a practical aesthetic. It is people-oriented and attentively takes care of every behavior of every occupant."
Both marketing and products are the specific business improvements of KWG digital transformation. McKinsey research shows that major enterprises are gearing up and full of ambition,hoping to achieve 5%-10% annual growth and cost efficiency through digital initiatives in the next three to five years. In fact, the digital effect of KWG has already begun to show in the performance level.
Take gross margin for example, the financial report showed that for the six months ended 30 June 2021, KWG recorded an equity-based consolidated core gross margin of 32.8%, an industry-leading performance against a backdrop of generally declining gross margins. The reason is that, Kong Jianmin, chairman of the board of Directors of KWG, believes that in addition to the proportion of high-end products and investment property income increase, in terms of cost reduction, the digital transformation of the company is very helpful to the overall cost control.
In fact, KWG regards digitalization as an important way for real estate enterprises to deal with the current market environment. Facing the regulatory environment of land price limit and sale price limit, KWG believes that the key for enterprises is to improve their own sales speed, reduce product costs through large-scale operation, and improve efficiency through digital transformation, so as to improve the overall gross profit margin.
"This year into next year, we start to realize value." Tang Liang said that with the intellectualization of KWG's overall operation, including the intellectualization of internal operation and the intellectualization of customer-centered digital platform, KWG's digitalization will begin to blossom and bear fruit.
At present, KWG digital transformation has been recognized by the authority. On November 2nd, the "2021-'Dingge Award' Digital Transformation Pioneer List" was unveiled in Beijing, KWG won the "Supply Chain Model of the Year Award" for its supply chain financing project which marks a solid step towards digital transformation of KWG.
Note: DHR, or Digital HR Platform, refers to the use of social, mobile, analytics and cloud (SMAC) technologies to improve HR efficiency.
(Editor: Xu Shuai)
